How long does bankruptcy take?
This is one of the most common questions when it comes to bankruptcy. Many clients have questions regarding the timeline to get out of debt. There are two main types of consumer bankruptcies, Chapter 7 and Chapter 13. The timelines from these two types of bankruptcy vary.
However, much of the bankruptcy depends on the clients ability to initiate the consultation, hire an attorney, pay the fees and gather the documents necessary to file bankruptcy.
Chapter 7 Bankruptcy Timeline
Finding an attorney and consultations
You must first meet with different attorneys to find the best attorney for your needs. The amount of time this takes is dependent on your schedule and your commitment to finding the right attorney.
Initial bankruptcy consultations take about 30 minutes. Of course, consultations can take longer if you have questions. However, many bankruptcy attorneys offer free consultations and will be more than happy to meet with you on your time. Bankruptcy attorneys understand that you cannot take a day off of work to meet with attorneys. Take your time to find the right attorney.
Gathering documents and paying fees
I have found this is the hardest part of bankruptcy. There are a number of financial documents and records that is required to complete your case and do the proper due diligence to make sure all the “T”s are crossed and the “I”s are dotted.
Additionally, paying fees are going to be the second most difficult task for most people filing bankruptcy. However, again, make sure you chose the right attorney. There are a number of excellent bankruptcy attorneys who offer competitive rates.
Drafting the petition
If you have gathered the documents and paid the fees, most experienced bankruptcy attorneys, in emergency situations, can literally sit down with you and file the case that same day. However, under normal circumstances, it should take no longer than a week to draft your petition. After the petition is drafted, you should always sit down with your attorney to go over the information and make sure you and your attorney are on the same page.
The petition should have all of your debts, income and assets listed on your petition among other things. You should make sure, with your attorney, that all the information is true, accurate and complete.
Take the first credit counseling class.
Before your file your case, you will need to take the credit counseling class. The class lasts approximately one hour and can be done on line or over the phone.
Filing your case
Once your case is filed, your attorney should receive your court date that same day.
Your court date also referred to as the meeting of creditors or 341 hearing is approximately 30-45 days from the date of filing. This is dependent on the Court. Your attorney will not be able to chose your Court date.
Take the second class
After your case is filed, you will need to take what is called the Debtor Education or Financial Management class. I recommend that you take the second class right after your case is filed and your receive your case number. This way you will not have to worry about it anymore.
At about the time of your Court date, you should contact your attorney and/or your car finance company. You will need to make a decision on what you intend to do with your car. Your attorney will be able to explain reaffirmation agreements to you and provide other options.
If there are no other issues in your case, and the trustee is not liquidating any of your property, you should receive your discharge approximately 3 to 4 months from the date you filed your case.
The Chapter 13 will follow the same pattern up until you take the second class. You will not go through the reaffirmation process.
Second Court Date
When you file a Chapter 13 there are two court dates. The second court date is called the confirmation hearing. However, in most cases, you will not have to attend the second court date. Different jurisdictions and judges set different times for the second court date. Your attorney must show up to this court date unless otherwise told by the court or bankruptcy trustee.
Make payments for 3 or 5 years
If your Chapter 13 case/plan is confirmed at the confirmation hearing, you will make the monthly plan payments for 3 or 5 years in most cases.
After the 3 or 5 year period, if you have completed all your plan payments, and there are no other issues that need to be resolved, you will receive a discharge.
For further information contact a bankruptcy attorney.